Question

Sairra, LLC purchased only one asset during the current year (a full 12-month tax year). Sairra placed in service furniture (7- year property) on April 16 with a basis of $35,000. Calculate the maximum depreciation expense for the current year? ignoring S179 and bonus depreciation). (Use MACRS Table 1 (Round final answer to the nearest whole number.) Multiple Choice $5,892. $2,501. None of the choices are correct. $5,002. $7,000.

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Answer #1

Solution: $5,002

Explanation: As asset's recovery period is 7 years and the half-year convention applies, thus will be computed as:

$35000 * 0.1429 = $5001.5

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